Moving on, today the market gave us a huge rally, ostensibly because of Treasury Secretary Tim Geithner’s plan to remove hundreds of billions of dollars of toxic debt from bank balance sheets.  To me, the reason for the market’s strength is unimportant (see Rule #2 above).  To me, only the charts are important.  With this advance, we now have seven consecutive days in which the number of stocks hitting new lows on the NYSE has been fewer than 40. We also have numerous major indexes whose intermediate-term trends are poised to turn from negative to positive.  Coming off a bottom that’s brought the lowest consumer confidence numbers in history, this uptrend has the potential to be a big one … precisely because no one expects it.

Let’s face it; nobody is greedy today.  People are worried about the safety of their banks!  And to me that spells opportunity.

So, looking around at my growing Watch List, I find this company well worth writing about … and perhaps investing in.

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It’s Allegiant Travel (ALGT), a budget airline focused like a laser on the price-sensitive vacationer headed for California, Las Vegas, Phoenix, Florida or South Carolina.  Now, mention airlines to most investors today, and they’ll say, “No thanks.”  Everyone knows the airlines are in rough shape.  Demand has fallen off the cliff.  All the big guys are cutting flights, mothballing planes in the desert, and offering rock-bottom fares to fill the seats in the planes still flying.

But that’s exactly why now might be the best time to invest in an airline!  So let’s look at Allegiant.

Headquartered in Las Vegas, the airline was founded in 1997.  It’s grown revenues every year of this decade, and in the fourth quarter of 2008, when every major airline was crying its eyes out, Allegiant’s revenues even grew 21% from the year before to $122 million.  Perhaps more impressively, it even saw revenues grow from the third quarter to the fourth quarter!

Most impressively, its after-tax profit margin was a plump 14.9%!

So how does Allegiant do it?  It flies from small cities to those vacation spots, so fees are lower at one end.  Competition is lower too.  It flies only MD80s, thus minimizing complexity.  And it partners with hotels, vacation planners, car rental firms and vacation planners to offer low-cost package deals.

It’s a classic growth story; the little upstart, with bare-bones overhead, coming in to steal business from the big old companies who simply have too much overhead and can’t get their costs down to compete.

Also, the fact that the stock is young and little-known means it’s much more sensitive to potential buying power than potential selling power.  At last count, the stock was owned by only 57 mutual finds, while Southwest (LUV) was owned by 295 and Delta (DAL) was owned by 198.

The chart is the main reason the stock came to our attention in the first place, and here’s what we see today.  ALGT came public in late 2006 at 24, peaked at 39 in late 2007 and bottomed at 16 in July 2008, four months before the market crash.  It then ran all the way up to 49 at the end of 2008, and since then it’s been digesting that gain.  Most recently, it’s been building a base at 40, and if you like the story, you could nibble on a few shares here.